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The following article originally appeared on POLITICO

Sen. Mitch McConnell is sprinting toward a showdown with House Republicans over infrastructure programs on the brink of expiring, and the Export-Import Bank — an agency the GOP leader loathes — could be his ace in the hole.

McConnell, the Senate majority leader, isn’t shy about his distaste for the government-backed program — on Sunday he called it a “New Deal relic” that’s outlived its usefulness. But renewing the charter for the bank, the country’s chief credit export agency, could be the key to pushing his ambitious transportation bill through Congress.

House leaders are divided over whether to re-up the bank, which Sen. Ted Cruz (R-Texas) and other hardline conservatives decry as “crony capitalism.” And Cruz ruffled more than a few feathers Friday when he accused McConnell of telling a “flat-out lie” about his plans for the Ex-Im bank.

But enough House lawmakers support renewing Ex-Im that they could back an otherwise detestable transportation bill that does just that. And the White House has made clear that whatever transportation bill lands on the president’s desk come end-of-July better have an Ex-Im reauthorization attached.

That leaves both chambers with an old-fashioned game of chicken, as the clock ticks down on a July 31 deadline to do something — anything — before transportation programs expire, shuttering funding for state projects and furloughing thousands of government employees.

In a meeting with transportation lobbyists Friday afternoon, McConnell said he was open to a short-term extension if it was needed but insisted that any temporary patch the Senate sends over to the House will not have an Ex-Im provision attached.

It’s all but guaranteed lawmakers won’t reach consensus on a long-term transportation bill by Friday, when current highway and transit authority expires. And House leaders are unlikely to just take up the Senate plan and move it through the chamber, in effect agreeing to six years of transportation policy that House lawmakers had no hand in developing.

Sen. Tom Carper (D-Del.), who opposes the Senate proposal, said Sunday that his sense is that “the hurdles that have been thrown up are probably overcomeable” in the upper chamber, but that “the House Republicans show no interest in doing this. … Bad policy, bad pay-fors, better alternative.”

House leaders in both parties spent last week urging the Senate to just take up its plan — a mid-December extension that gives lawmakers a handful of months to pull together a sweeping tax revamp that would also provide several years of infrastructure funding. And some top Senate Democrats have indicated that is also their preferred method.

But McConnell is highly skeptical of an international tax overhaul coming together this year and is ready to clear the Highway Trust Fund off the congressional calendar through the 2016 election cycle.

“Read my lips: There will not be international tax reform this year,” McConnell said in Friday’s meeting, according to multiple sources. The Kentucky Republican also stressed that the offsets being used to provide three years of guaranteed funding likely wouldn’t be around later in the fall, according to sources in the meeting, because lawmakers would try to use the pay-fors for sequester-related budget relief.

What unfolds over the next few days in the Senate could put House leaders in quite a pickle, just as lawmakers are antsy to leave town for the August recess.

If the bipartisan bill McConnell has crafted with Sen. Barbara Boxer (D-Calif.) passes the Senate later this week, the upper chamber could also move a short-term extension, possibly around two months, and send both proposals to the House.

House leaders would then be faced with a choice: Bring up the McConnell bill with three years of infrastructure funding and an Ex-Im renewal and embrace it as is, or take up the short-term patch sans any Ex-Im provisions and risk the ire of the White House.

As with everything in Congress, there are no guarantees. And it’s possible House GOP leaders could find some way to out-maneuver the Senate and force the upper chamber to swallow their five-month patch, or find a creative third way.

But, at least in the Senate, an Ex-Im revival could be just the pot-sweetener needed to rally enough Democrats to ensure final passage of the bipartisan infrastructure plan.

An amendment renewing the bank, which expired at the end of June, easily cleared a procedural hurdle Sunday afternoon, setting the stage for a vote on the proposal Monday.

Monday’s Ex-Im vote is expected to succeed. And coupling an Ex-Im revival with the multiyear highway and transit bill could be enough to convince tepid Senate Democrats to support the measure, sending the legislation over to the House later this week just before current authority is set to expire.

“I could support a bill with this framework,” said Sen. Ben Cardin after Sunday’s vote. Cardin, a big backer of Ex-Im, voted against advancing the bill last week and noted he still has concerns with some of the bill’s highway and rail safety provisions he said must be worked out first.

The Maryland Democrat is likely not alone. If the McConnell-Boxer bill is the only path forward for Ex-Im, that could convince enough Senate Democrats who are otherwise lukewarm to the bill’s policy and offsets to vote in support of final passage.

Sen. Angus King (I-Maine), who has been forthcoming about supporting the bill despite still having qualms with several aspects, said he’s all for the Ex-Im language. “I mean, it’s a useful agency,” he told POLITICO. “It helps businesses across the country, including in Maine, and it returns money to the Treasury.”

McConnell again indicated his openness Sunday to considering amendments that are actually relevant to the bill, once the Senate moves past unrelated issues like Ex-Im reauthorization.

But Senate aides have said it is unlikely the chamber will have the time to fit in debate on many of the more than 260 amendments that have been filed, given the goal of reaching a passage vote before the House plans to gavel out for August recess on Thursday.

On Sunday, Sen. Richard Blumenthal (D-Conn.) said it’s a shame that Senate leaders are allowing unrelated issues to dominate so much of the debate while dozens of amendments sit in the queue, untouched.

“I’m really disappointed and angry that these irrelevant amendments are receiving votes when a number of the very pertinent and urgent measures I have proposed may be denied votes,” Blumenthal told POLITICO.

“Transportation safety, auto defects, NHTSA powers, penalties for violations — are all the subjects of my amendments that are directly pertinent and important to this bill may not receive votes because we’re spending a lot of time and energy on repealing the Affordable Care Act, which is totally irrelevant,” Blumenthal said.

The Connecticut Democrat has offered a bevy of amendments, including requiring used car dealers to fix defective vehicles before selling them; requiring companies that rent trucks to provide customers with maintenance reports; reuqiring the federal government to fine or imprison — or both — auto industry executives who fail to inform the federal auto safety watchdog agency and the public about auto safety issues in a timely manner.

“So I’m hopeful we can avoid this morass and really focus on the measures that are profoundly significant and also relevant to this bill,” he said.

The following article was originally published at Bloomberg Law

House hearings are planned on separate bills to lift the 40-year ban on crude oil exports as the issue begins to gain more attention from House Republicans.

The House Agriculture Committee will hold a hearing July 8 on legislation (H.R. 2369) from committee Chairman Michael Conaway (R-Texas) that is nearly identical to legislation (S. 1312) to lift the ban introduced by Senate Energy and Natural Resources Committee Chairman Lisa Murkowski (R-Alaska).

The hearing, Energy & the Rural Economy: The Economic Impact of Exporting Crude Oil, is scheduled to feature testimony from Continental Resources Inc. Chairman and Chief Executive Officer Harold Hamm, as well as Terrence A. Duffy, executive chairman and president of CME Group, formerly known as the Chicago Mercantile Stock Exchange, and Frank Rusco of the Government Accountability Office.

In addition, the House Energy and Commerce Subcommittee on Energy and Power has scheduled a separate hearing July 9 on legislation (H.R. 702) to remove the ban from Rep. Joe Barton (R-Texas).

Policy Out of Touch

Conaway's bill, which is being co-sponsored by Rep. Henry Cuellar (D-Texas), would authorize the export of U.S. crude oil and condensate, which was banned in the wake of the 1970s Arab oil embargo.

“The 40-year ban on oil exports is out-of-date and out of touch with America's thriving energy industry,” Conaway said in May, when he introduced the bill (96 ITD, 5/19/15).

Witnesses scheduled to testify at the Energy and Power Subcommittee hearing include Czech Ambassador to the U.S. Petr Gandalovic; Mark Kreinbihl, group president of the Gorman-Rupp Co.; Kirk Lippold, president of Lippold Strategies LLC; and W. David Montgomery, senior vice president of NERA Economic Consulting.

70 Co-Sponsors

In addition to repealing the section of the 1975 Energy Policy and Conservation Act that established the crude oil export ban, the Barton bill, which has 70 co-sponsors, would bar the federal government from imposing or enforcing any similar restrictions and would require the Energy Department to submit a report on the appropriate size and makeup of the Strategic Petroleum Reserve.

Barton said he is lobbying House Energy and Commerce Committee Chairman Fred Upton (R-Mich.) to include his bill in a broader energy package being developed in the committee, although analysts think it will likely be moved separately.

Legislation to end the export ban got a boost in June when Upton said the issue should be on the House Energy and Commerce Committee's “agenda this year” (106 ITD, 6/3/15).

Previously, Upton and other committee members, such as Energy and Power Subcommittee Chairman Ed Whitfield (R-Ky.), have indicated they were in no hurry to act on the ban, which refiners such as Alon USA, Monroe Energy, PBF Energy and Philadelphia Energy Solutions argue should be left in place.

Supporters of changing the law include the Independent Petroleum Association of America, which represents companies such as Whiting Petroleum Corp. and Marathon Oil Corp.

In a July 7 letter, the group said the White House should use administrative action to lift the crude oil export ban.

“Today, with the advancement of hydraulic fracturing and improved horizontal drilling technologies, America's energy industry can provide the nation's oil and natural gas at levels not seen since the 1970s,” IPAA President and CEO Barry Russell wrote in a letter addressed to President Barack Obama. “However, the 1970s laws that govern America's crude oil exports are outdated and inconsistent.”

The article was originally featured in Company Week

For several years there have been indications that manufacturing within the United States is making a comeback.

A Boston Consulting Group survey found that 21 percent of U.S. manufacturers are moving, or planning to move, a share of their production back home from offshore locations. Walmart launched an initiative to source $50 billion in additional goods that are "Made In America" within the next decade. Whirlpool, GE, Peerless, Motorola, and a host of other companies large and small are re-shoring -- reversing previous offshoring decisions.

Given that manufacturing and the jobs it creates is so critical to a strong and stable economy, and that 80 percent of world trade is in goods and not services, it's a positive sign, and all concerned parties would be quite pleased to see it continue.

However, realists will admit that stateside manufacturing will never return to what it once was. For example, one of the factors that brought GE's water heater plant from China back to Kentucky were wage concessions from $22/hour to $13/hour. Thanks to automation, a mothballed textile plant in South Carolina is up and running again, but 130 workers are making what it once took 2,000 workers to produce. To compete on a worldwide playing field, a company must identify and exploit comparative advantages that give it an edge over its rivals, and sometimes that can actually include producing goods stateside.

Most reshoring success stories are smaller in scale and do not bring back thousands of jobs. But that's not a bad thing, considering the average U.S. manufacturing company employs less than 40 people. It means companies of any size can consider reshoring.

Several factors are causing companies to reshore. Although overseas labor costs are still a fraction of American costs, wages in China and other countries are rising by at least 15 percent annually, and with wages decreasing in the U.S., the gap is shrinking.

But that's only part of it. American companies were somewhat myopic in their decision to manufacture abroad, basing their decision solely on labor costs which are typically only 20 to 30 percent of total product cost. Include transport and inventory costs, insurance, currency rate risks, VATs, and duties, and the offshore bargain isn't as impressive. Additional factors should be weighed, such as vastly longer lead times and delays, quality issues due to language barriers or corporate cultures, less flexibility in meeting customers' changes in demand, or specification, to identify just a few.

When the comparative advantage of lower overseas labor costs can be sufficiently reduced, often achieved by automating its processes, many companies can rationally make a decision to reshore, when factoring in the benefits of producing goods in our own backyard.

Rather than focusing on labor alone, companies are learning to evaluate a product's Total Landed Cost. TLC models attempt to sum up all of the supply chain costs up to the delivery of your product to your customer. Looking at the big picture, many companies discover that their savings wasn't what they thought. And even if there is some savings overseas, getting your product delivered 10 weeks faster, or being able to market your product as "Made in USA" might outweigh a slightly higher TLC.

Unfortunately when production went overseas, so did the much of the infrastructure. Would you be able to re-shore if your supplier base is still in India? Can you find skilled employees to produce your goods and keep your equipment running? Should you invest in the machinery that will automate a process in order to build a quality product efficiently? And where is your customer base? Especially for larger durable goods, it is usually more cost effective to manufacture them where they're sold.

The decision to offshore manufacturing is more complicated than originally assumed. For some commodities, it will always make sense to seek the lowest labor costs and send production abroad. But for others, the case to re-shore is more compelling.

This is a story that's still unfolding. From President Obama to governors and mayors to consultants and unions, everyone is watching this activity closely, unsure if it will be a meaningful trend or simply a modest adjustment. Reshoring will occur only when it makes financial and logistical sense, not out of patriotism and hopefully not with excessive government incentives.

As leaders and experts within your markets and processes, it falls upon you to review your business models and determine where is best to manufacture your products. After that analysis, maybe a few more jobs will be heading back to the United States.

Three Republican presidential contenders July 2 called for an “orderly liquidation” of the Export-Import Bank following the expiration of the bank's charter on June 30.

Sens. Marco Rubio (R-Fla.), Ted Cruz (R-Texas) and Rand Paul (R-Ky.) sent a letter to the bank's Chairman Fred Hochberg requesting information on Ex-Im's timeline for liquidation and which employees are participating in the liquidation.

They are also seeking a report on the dissolution of the Ex-Im Bank's board of directors, the plan to return Ex-Im's properties to the General Services Administration (GSA), and how the bank will continue servicing existing Ex-Im loans and obligations that have not matured.

They were joined in their request by Sens. Mike Lee (R-Utah), Ben Sasse (R-Neb.) and Pat Toomey (R-Pa.).

Ex-Im's lapsed charter means the bank cannot acquire new obligations or assume new liabilities, or issue new bonds and debts. The agency remains open, however, as a corporate entity “to exercise functions for purposes of an ‘orderly liquidation,’ ” the lawmakers said.

No Case Law

But the bank may have broad leeway in structuring any liquidation if in fact Congress does not act to extend its charter later in the summer, as proponents hope. As the Congressional Research Service has noted in past reports on the bank, Section 635f of the Bank's charter offers “little guidance as to what an ‘orderly liquidation’ entails.”

Specifically, Ex-Im's charter does not address how long the bank may continue to engage in specified permissible functions after its termination—this is a significant omission, according to CRS, the research arm of Congress. CRS has noted that there does not appear to be any case law interpreting “orderly liquidation” as it applies specifically to Section 635f of the bank's charter, which could give the bank considerable discretion in structuring any liquidation.

The senators asked Hochberg to supply them with the requested information by July 15.

Democratic lawmakers supportive of the bank and extending its charter are pushing for Republican leadership in the House and the Senate to bring legislation to the floor of both chambers in July but have not received a commitment (126 ITD, 7/1/15).

Senate Majority Leader Mitch McConnell (R-Ky.) has reportedly said he will allow supporters of the bank to have a vote on extending the bank's charter if they attach their provisions to a highway bill—must-pass legislation—even though McConnell himself does not support plans to give new life to the bank.

Following MConnell's announcement, the right-leaning lobbying group Heritage Action for America in a July 1 memo, noted that a majority of McConnell's conference still opposes reauthorization as does Senate Banking Committee Chairman Richard Shelby (R-Ala.).

McConnell's announcement that he will allow a vote “began charting a new course just six months into his tenure as majority leader,” Heritage said. “Out of the roughly 1,285 non-budget resolution amendments introduced this year, only two have been adopted over McConnell's no votes.”

The following article was originally posted by Catherine Boudreau of Bloomberg Law:

The livestock and meatpacking industry has largely rejected a Senate draft that would repeal mandatory country-of-origin labeling (COOL) rules for beef and pork and replace them with a voluntary program.

Congress's first priority should be complete repeal of COOL to ensure Canada and Mexico can't enforce retaliatory measures against the U.S. economy, meat industry representatives said at a Senate Agriculture Committee hearing on June 25. Also, any delays associated with Congress working out a legislative compromise on voluntary labeling creates more uncertainty for U.S. producers, according to leaders from the North American Meat Institute (NAMI), American Farm Bureau Federation (AFBF), the Kansas Livestock Association (KLA) and Archer-Daniels-Midland Co.

“It's time to go ahead and repeal it and allow industry to realize premiums and not make industry realize cost,” Jaret Moyer, president of the KLA testified. “A purely voluntary label done by industry to realize premiums is a much better way than one brought up through this body.”

Transparency Sought

Some livestock operations support a voluntary label in order to protect the integrity of the U.S. meat label and create a more transparent food supply for consumers.

Leo McDonnell, executive officer and director emeritus for the U.S. Cattlemen's Association (USCA), said his organization wanted COOL in order to distinguish U.S. meat from imports.

“Half the reason we wanted country-of-origin labeling is because you could [import] a Canadian or Mexican cow, and if they were processed and slaughtered in the U.S., it could be called U.S. beef,” McDonnell said. “There were no definitions for U.S. beef.”

McDonnell added that if a voluntary program isn't included in legislation this time around, it would be a battle to bring it up again.

COOL Proposals in Congress

Lawmakers are working on a solution to a World Trade Organization dispute with Canada and Mexico.

The WTO ruled for the fourth time last month that COOL, which requires meat packers to indicate on retail packaging where each animal was born, raised and slaughtered, discriminates against imported cattle and hogs.

Sen. Debbie Stabenow (D-Mich.), ranking member of the Agriculture Committee, proposed draft language that conflicts with a measure (H.R. 2393) the House passed June 10.

The House bill would repeal COOL rules for beef, pork and chicken and doesn't contain language on a voluntary labeling program at the Agriculture Department, the agency that has implemented COOL since 2009.

House Agriculture Committee Chairman Michael Conaway (R-Texas) has said he doesn't think the government should get involved in a voluntary COOL program and the industry should create a label if there is demand.

Canada, Mexico Retaliation

Canada and Mexico have requested a combined $3.2 billion in retaliatory trade measures against the U.S. if COOL isn't brought into compliance with the WTO decision.

The U.S. objected to those estimates during meetings with the WTO Dispute Settlement Body (DSB), referring the issue to arbitration that delays—by at least another 60 days—Canada and Mexico's ability to seek sanctions.

By The Denver Post Editorial Board

Not long after last week's narrow House vote to provide "fast-track authority" for the president to finish a trade deal with nations across the Pacific Rim, Colorado Rep. Ken Buck, a Republican, sent out a fund-raising e-mail touting his opposition.

"I proudly voted to defeat ObamaTrade ... twice!" Buck declared.

And why? Because "Obama could use his overreaching trade authority to advance: A radical climate change agenda; Amnesty for illegal aliens; Unpopular gun control laws; Payoffs for big labor."

This breathtaking series of dangers is both imaginary and unrelated to the actual goals of the Trans-Pacific Partnership (TPP). And the last item, "payoffs for big labor," is particularly ironic.

Labor unions have been, along with environmental groups, the most tireless and formidable opponents of the trade deal. Labor's opposition explains why so many Democrats, including Colorado Reps. Diana DeGette and Ed Perlmutter, voted against fast-track authority.

For Buck to claim that a fast-track vote will somehow redound to organized labor's benefit is simply mind-boggling.

Every president asks for fast-track authority before concluding trade deals. Negotiators can't have Congress demanding changes to a deal involving 11 other countries that took years to finalize.

If Congress doesn't like the final product, it is free to reject it outright at that time.

Colorado exports more than $1 billion in agricultural products, and more than $300 million in beef and veal alone — much of which comes from Buck's 4th Congressional District. If anyone should be supporting free trade, it is the freshman congressman.

Fortunately, three other Colorado House Republicans and one House Democrat, as well as Democratic Sen. Michael Bennet and Republican Sen. Cory Gardner, seem to understand the importance of the TPP, which covers 40 percent of U.S. trade, in breaking down barriers and creating a level playing field for Colorado exporters.

Indeed, Bennet and Gardner voted again Tuesday on a procedural measure to move fast-track authority forward — with the final vote expected to occur Wednesday. In doing so, they stood by their votes last month.

The fast-track drama in Congress has gone on long enough. It's time to support expanded trade.

Written by Tyler RauertNewly-Appointed Chair of the WTC Denver Trade Policy Committee

This morning the US Senate voted to end debate on trade promotion ("fast-track") authority. The 60-37 procedural motion sets up a vote on final passage of TPA tomorrow. If the Senate approves, TPA will then be sent to President Obama's desk to become law. Senators Bennett and Gardner both voted Yes today.

The Senate voted "yes" on this motion even though it didn't include the Trade Adjustment Assistance (TAA) package for workers displaced by increased trade that was part of the TPA package approved by the Senate in May. As you may recall, it was that TAA provision that was voted down in the House last week that caused all the drama on this issue.

To move TPA forward, the White House and leaders in both chambers broke TAA away from TPA to try to approve both in separate votes. After the Senate votes tomorrow on final passage of TPA it will take a procedural vote on a package that includes TAA and trade preferences for African countries known as the African Growth and Opportunity Act (AGOA). Senate leadership promised both bills as well as a customs bill will reach the President's desk by the end of the week.

The House has already passed TPA but it still needs to vote on TAA which faces some pretty stiff opposition so its passage is not certain. The unresolved issue of the Export-Import bank will also likely hover over the 4th of July recess.

CNN Politics recently created a very educational and informative video on the inner-workings of transnational trade agreements, and the importance of both the TPP (Trans Pacific Partnership) as well as Trade Promotion Authority (TPA.)

Polis hasn't actually come out for the TPP — but that's because it hasn't been fully negotiated.

But he's done the next best thing. He's signaled that he supports so-called fast-track authority for the president to finish the agreement with 11 other countries, including Japan, Canada, Vietnam and Australia, to be followed by an up or down vote in Congress.

And in taking that stance, Polis becomes a sadly rare phenomenon: a progressive Democrat who still appreciates the enormous benefits of expanded trade and the importance of keeping the U.S. in the driver's seat in crafting trade agreements.

He also becomes a key "yes" vote in the House.

The Senate passed fast-track authority last month and the House is expected to vote this month, perhaps in the next few days. Most Democrats and a few Republicans oppose it, mainly because of environmental and wage fears. Polis is the only one of Colorado's three Democratic representatives to support fast track at the moment, although Rep. Ed Perlmutter's office says he is still undecided.

Moreover, he rightly argues, "it's simply not fair that products produced in Japan see an average tariff of only two to three percent when coming into the U.S., but some products like dairy produced in Colorado could see Japanese tariffs as high as 600 percent."

Contrary to myth, he adds, "98 percent of U.S. exporters are small businesses" that create jobs.

Congress wouldn't have to approve the TPP once it gives the president fast-track authority. But without it, the president isn't likely to finalize the deal. He should be given authority to proceed.

The planning for World Trade Day on May 19th this year is well underway. Today marks one month from the early bird registration rate deadline! Be sure to register now. We are still accepting corporate sponsors for this event, which is the best opportunity of the year to get maximum exposure to Colorado's international business community. We are delighted to be hosting more than 30 international delegates this year as well, who will all be seeking B2B meetings. Stay tuned for opportunities to request individual meetings!

We also have many other events coming your way leading up to World Trade Day, such as Euro Networking this evening hosted by the Swedes, the Australian Ambassador is coming in next Tuesday, next month is our Next Gen Networking Event and the BIS Export Compliance seminar, and we are pleased to partner with the Embassy of Côte d'Ivoire to welcome the Prime Minister of Côte d'Ivoire and the Minister of Mining at a conference in April.